"They said they would give us a new car with a monthly lease of 3,137 yuan, and the car would belong to us after five years of leasing. If we don't want to continue leasing, we can return the car at any time after paying the rent for one year." Ms. Wei from Guangxi recently recalled to the Legal Daily reporter that in July last year, she and her brother saw an advertisement that said "free rental when the rental is full" and "you can make money and get a car at the same time." Since they already had the idea of renting a car to run an online ride-hailing business, they signed an agreement with the car rental company on the spot after consulting.
Ms. Wei's brother paid the agreed rent for one year and then asked the car rental company to return the car because he no longer wanted to drive a ride-hailing service. Unexpectedly, the car rental company refused to return the car on the grounds that the vehicle had not been maintained for the agreed number of times.
"When we signed the contract, no one told us there were any restrictions on returning the car." The brother and sister have repeatedly negotiated with the car rental company to return the car, but they've been ignored. They can only negotiate while continuing to make payments. "I don't know if the promise of giving the car away after five years will change. Besides, the cost of a five-year lease is nearly 200,000 yuan, which is much more expensive than buying a car outright."
A recent investigation by reporters revealed that some car rental companies are offering "rent a full car and get it for free" or "rent-to-buy" models, whereby the car is transferred to the renter after a certain rental period. This model appears to offer low barriers to entry and high flexibility, but many consumers have reported encountering pitfalls. While the company promises numerous advantages during the rental process, it then imposes numerous restrictions during the actual use and return of the car, making it difficult to cancel the lease or protect their rights.
It is difficult to terminate the lease at any time
In 2024, Mr. Song from Guangdong Province purchased a truck from a local car company through a "rent-to-buy" model for his freight transportation business. The truck was registered under the name of a logistics company. With the recommendation of a financial leasing company, Mr. Song applied for a bank loan with an agreed monthly repayment of over 3,500 yuan for 36 installments. Upon repayment, the vehicle would become Mr. Song's property. In March of this year, Mr. Song, due to health reasons, decided to stop trucking and contacted both the car company and the financial leasing company to discuss the subsequent handling of the purchased vehicle.
"At the beginning, they said I could cancel the lease at any time, and there was no mention of liquidated damages in the contract. But as soon as I asked about canceling the lease, the car company refused to do it." Mr. Song told reporters that the car company was only willing to "repurchase on behalf of the operator": based on the remaining outstanding balance of the vehicle and the vehicle's appraised value, Mr. Song needed to pay the car company more than 30,000 yuan (including vehicle depreciation, etc.), and the company would take back the vehicle and bear the subsequent monthly payments.
"The company has the final say on the vehicle's valuation. When we questioned the valuation, they threatened not to repurchase it!" Mr. Song angrily said. Forced by the car company's recalcitrant stance, Mr. Song considered compromising, but upon closer inspection, he realized that doing so would still leave the bank loan in his name. "If the company defaults on its monthly payments, the bank will still come after me. Not only would I have to continue paying the loan, but I'd also lose the car and my 30,000 yuan."
Mr. Song learned from the financial leasing company that if the car company agreed to a "secondary debt modification" within the system, the debt relationship would be completely resolved and he would not be contacted again for vehicle issues. However, the car company also required a 6,000 yuan "modification service fee" to modify the debt, and explicitly stated that the service fee was non-refundable and that no supplementary contract would be signed.
"We were worried that if we gave the money and the debt wasn't changed, or if the other party deliberately refused to change it, we'd lose 6,000 yuan," said Mr. Song. Ultimately, Mr. Song and his family decided to settle the remaining 26 installments of the debt in one lump sum. They also paid the company for the vehicle insurance, registration fees, and transfer fees for that year, obtaining ownership of the vehicle. "We were told we could return the loan at any time, but when we really wanted to, we ran into all sorts of pitfalls. In the end, we had to buy the car back and resell it, which was a significant loss."
Only talking about benefits to induce signing
Mr. Hao from Beijing was unable to apply for a traditional loan due to his personal credit. In May this year, after seeing a related advertisement on a short video platform, he "rented instead of bought" a car from a car service company.
"The car was operating smoothly at first, until the rental became four days overdue," Mr. Hao recalled. He received a notice of overdue payment from the car company early that morning. He scraped together the money and transferred the rent, but the next morning discovered the car had been towed away. "My ID, driver's license, and cell phone were inside." When Mr. Hao contacted the car company, they said they were repossessing the car due to his breach of contract, and that the down payment and rental payments would not be refunded.
The reporter learned from Mr. Hao that when he signed the contract, he saw a clause stating that "if the rent is overdue, the company has the right to forcibly repossess the vehicle." "Because I was short on funds, I specifically asked the salesperson if there was any room for negotiation regarding overdue rent. The salesperson said that as long as the overdue period was short and the owner hadn't lost contact, there wouldn't be much of a problem. But now, after I complained, the staff said the salesperson's verbal promise had nothing to do with the company."
Mr. Hao also revealed that another car buyer from the same company drove the car back to his hometown near the border. The company found him in breach of contract on the grounds that "the contract stipulated that the vehicle could not be used within 150 kilometers of the border" and his car was towed away.
The contract Mr. Hao showed reporters does indeed contain this restriction on vehicle use. "When we signed the contract, no one informed us of these restrictions. They only mentioned discounts and benefits, and didn't let us read the contract in detail. They repeatedly urged us to sign, saying, 'No problem with normal use.'"
Reporters' investigations revealed that some car rental companies use a specialized internal rhetoric to trick renters into signing "rent-to-buy" agreements. For example, they offer promises like, "No monthly rental pressure, early access to the car, and return at any time if you don't want to use it, no strings attached," "Even if your credit score isn't perfect, as long as you sign the contract, the company will provide a platform and guarantee a monthly income of over 12,000 yuan," and "Don't worry about vehicle depreciation; the company will cover that risk when the lease expires." However, in reality, not only are there various restrictions on returning the car, but companies also try to create traps in the contract, making it easy to default and leaving the renter with the risk of residual value.
There are also car rental companies that directly "make changes" in the contract.
According to media reports, in May of this year, Mr. Xia, a businessman in Hangzhou, Zhejiang, rented a Mercedes-Benz with the "E300L" badge from a car dealership in Yiwu. The agreement was for a 36-month lease with no penalty for early payment and transfer of ownership. He made a down payment of 70,000 yuan and subsequently made monthly payments of 5,040 yuan to a Yiwu company, totaling over 250,000 yuan over 36 months. However, he received only a blank contract with a photo of the "Mercedes-Benz e" model number. In August, when Mr. Xia went to the dealership for maintenance, he discovered the vehicle's model was actually an E200, which didn't match the badge (the used prices of the two vehicles differed by nearly double). He requested a return but was refused. On September 1st, Mr. Xia refused to pay the August rent. On the 13th, when he tried to return the vehicle, he discovered it had been towed away, with valuables still inside. Mr. Xia is now considering legal action.
Fees deducted for various reasons
In May of this year, Mr. Li from Zhejiang Province "leased" a new energy vehicle with a down payment of 66,000 yuan and 36 monthly payments of 8,000 yuan. Mr. Li said, "The cost of using the car is too high. I've lost 100,000 yuan in just 10 days of driving the rental car."
What happened?
Mr. Li told reporters that just 10 days after picking up his car, it was rear-ended by a truck on the highway and totaled. Traffic police determined the other party was fully responsible, and the other party's insurance company agreed to a total loss claim of 384,000 yuan. "Unexpectedly, the car rental company refused to accept the total loss claim, insisting on repairing the car and deducting 34,000 yuan from my depreciation fee." Mr. Li said he was worried about the safety risks of the car after the major accident and was unwilling to continue renting it. However, the company informed him that if he returned the car, neither the down payment nor the depreciation fee (a total of 100,000 yuan) would be refunded. Mr. Li negotiated with the car rental company several times, and they proposed a "seemingly reasonable" solution: settle the remaining rental fee in a lump sum, and the company would assist Mr. Li with the vehicle transfer and claim settlement procedures.
After Mr. Li agreed and made the payment, the car rental company repeatedly delayed the transfer, claiming it would take three or four months. "They're deliberately delaying the transfer until the car is repaired so the insurance company won't cover the total loss. Knowing I won't buy a car with a major accident, they're forcing me to break the contract and deduct my down payment and depreciation," Mr. Li said. He plans to visit the car brand's headquarters for further negotiations.
Mr. Li told reporters that he was hesitating whether to sue. "I consulted a lawyer, and he said that the contract is full of clauses protecting the company. I'm afraid that the lawsuit will be time-consuming and laborious, and I may not win in the end."
The reporter learned from interviews that many interviewees chose the "rent-to-buy" model for reasons such as "I can return the car if I want to during the lease period, and I can still get the car if I don't return it" and "I can't get a normal car loan due to credit problems." However, in the actual use of the car, they faced various problems because the ownership of the vehicle was not in their own name. In order to reduce losses, many people had to be "led by the nose" by the car rental company.
"When I first tried rent-to-own, I thought I was getting a good deal, but when I wanted to cancel the lease, I found it was full of traps. If I encounter similar situations in the future, I will make sure to fully understand the relevant terms and conditions to protect my own rights and interests," said one consumer interviewed.